Investing For Income
There are multiple ways to invest to provide your main source of income. My favorites are the stock market and real estate. Investing for income can provide a way to pay down debt, earn some extra cash, and support you in retirement.
This article will discuss investing for income in the stock market via stocks and bonds. In the stock market there are three forms of income; bond coupon payments, dividends and capital gains. Here are their formal definitions from Investopedia,
- Capital Gains – An increase in the value of a capital asset that gives it a higher worth than the purchase price.
- Dividend – a distribution of a portion of a company’s earnings, decided by the board of directors, to a class of its shareholders. Dividends can be issued as cash payments, as shares of stock, or other property.
- Coupon – the annual interest rate paid on a bond, expressed as a percentage of the face value.